The value of steel PRNs has dropped considerably on year on year figures from £120 per tonne in 2009 to the current price of just £7.50 per tonne, despite the price of steel staying strong.
According to industry experts, the drop in PRN value is because of demand on the export market, which drives the steel packaging industry. At this time last year steel PRNs were worth around £22.
PRN trading platform Scrap-ex director of markets Gareth Goodall said: “When the recession hit in 2008, overseas buyers stopped purchasing material, which meant less PRNs were being produced and the value of them went up. Now there is a lot of demand for steel packaging on the export market, so as more PRNs are produced the value is pushed down, having said that, we are currently in a bit of a data void because the PRN Q4 figures don’t come out until the end of March. So, we won’t know the full picture until we see those.”
However, the actual value of steel is strong with the current MRW/WRAP prices showing steel cans are being traded at £150 per tonne, with mixed cans at £140 per tonne.
One steel industry insider believes that the low PRN price is a result of an over-supply of PRNs in 2010. He said: “There was a lot of recycling of steel packaging last year and in the first three quarters of 2010 we recycled much more than was required for the whole of the year. So, we expect December’s PRNs to be carried over. I think we will see prices stay at these levels until the Government brings out new packaging recycling targets.”
Towards the end of the obligated year, businesses have the opportunity to carry over PRNs into the new year if they have already met their obligation for the previous year.
Steel was one of the only packaging materials to have its packaging recycling target increased over the next two years. Defra upped steel packaging recycling targets from 69% to 71% for 2011 and 2012.